August 8th Meet-Up Update:
We carpooled up to Sage Mountain Center from Butte to meet-up August 8th. Sage Mountain Center is located between Butte and Whitehall off Highway 2. While Linda Welsh welcomed her Airbnb guests (https://www.airbnb.com/rooms/4948880), we settled into the main dining hall with foods she had prepared. If you, your friends and family visiting the Butte area want a peaceful and beautiful get away book through the link above at Sage Mountain. Thanks Linda!
This month the subject was contractor negotiations. All involved in the meeting had stories to share. Investors roll their eyes when you mention contractors and I notice my contractor friends roll their eyes when you mention investors and projects…The overall conclusion regarding working with contractors is that upfront communication and win/win relationships work best. Sorry stories of what can go wrong usually boil down to miscommunication and poor business skills (on both sides of the contract). So, in an effort to not disclose member experiences but send you to a similar discussion, here is a link to a good discussion in Bigger Pockets on this very issue. This discussion addresses how a contractor makes money, what is negotiable and what is not: https://www.biggerpockets.com/forums/67/topics/429682-negotiating-with-gc-bids
During the August meet up, we also discussed dream projects in uptown Butte. These projects would require combined investments, creative financing and great rehab contractor skills. Cari Cox, investor and realtor has offered to set up tours of mentioned dream projects! She is hostess of the next meet-up and will take us through the Salvation Army building.
When dreaming, it is wise to talk about what motivates an investor. We talked about the “why” of real estate investing and for that matter, any of your interests. Each member shared a little of what motivates them to invest in real estate. There are goals for retirement, passive income and better living, but what happens when that goal is reached or when it’s harder than you thought? Where does the motivation come from then? A common theme was doing good for our community.
So, what does Butte need?
We began outlining needs in our community for different tenant groups. Students are getting a lot of attention and new construction and rehabbed units are newly in supply. One area that is not addressed that we know of is sober living housing.
“A sober home is exactly what it sounds like. It’s a place people can go when they first come out of rehab. Somewhere to live, drug- and alcohol-free. Residents take drug tests, attend 12-step meetings and have curfews to keep them on the straight and narrow.” from https://www.marketplace.org/2013/04/05/life/renting-homes-recovering-addicts-profit
This is a market that is bad when it’s bad and very profitable when it is good according to the above article. Experiences with pros and cons of renting to higher risk tenants without support of a sober living program were shared. General consensus was that this tenant group does better when mixed with other income and non-addict groups and poorly when concentrated into substandard living conditions with like-high risk neighbors.
Go figure…something to think about when rehabbing larger apartment buildings, perhaps plan in a couple sober living units. With so many investors concentrating on upscale units, it is wise for the long term investor to also look at this population of which there will be constant supply and need.
Next Women Real Estate Investors Network (WREIN) Monday, September 25th, 2017 6:00 to 7:30 101 E. Broadway Ave, Butte Montana.